Research has paid scant attention to how firms achieve ambidexterity
within inter-organizational relationships. In this study, we argue
that firms make use of distinct governance mechanisms that arise
from different inter-firm relationship types to enable exploitative
and explorative knowledge processes. Drawing upon an inductive study
of cooperative new product development projects, we find that
vertical relationships with suppliers were related to high levels of
formal control and low levels of partner integration. This
contributed to unilateral exploitation and exploration processes.
Conversely, horizontal relationships with competitors were related
to high levels of partner integration and low levels of formal
control. This contributed to mutual exploitation and exploration
processes. While both types of inter-firm relationships may enable
ambidexterity, firms have to select the type of relationship that
provides a supportive configuration of governance mechanisms for the
desired knowledge processes.